Sentinels, the AI-powered transaction monitoring solution we launched in February 2020, was recently spun out as a separate venture from Slimmer AI. Sentinels Founder & CEO Joost van Houten and team have raised a €5.7M seed round from INKEF Capital and a group of high-profile angel investors, including several members of the early Adyen team. This article by INKEF nicely describes their investment thesis.

We are super proud of what we’ve achieved to date with Sentinels, of Joost and his team, and of the business that they continue to build. Sentinels’ mission matters to all of us: fighting financial crime.

Our pivot to a Venture Studio

We used the momentum with Sentinels to pivot Slimmer AI into an AI B2B Venture Studio. This pivot builds on our 12 years of experience applying AI to solve real-world problems, and positions us well to leverage current opportunities and momentum to accelerate our growth.

We still develop new AI technology, we still apply this AI tech to solve business problems, and we still build commercially successful B2B software products. The difference? We now set these products and teams up to be separate independent ventures from the start. And rather than do all ideation ourselves, we also work with external founders who come to us to co-build their new venture.

The venture studio model is still relatively new in Europe (here is a great articles about the model). We’re not an accelerator nor an incubator. And we’re certainly not a VC. We continue to build several applied AI B2B ventures from the ground up. This means we’re the opposite of hands-off — we put in the blood-sweat-and-tears during the crucial early stage to build a new world-class company together with a founding team.

And we build multiple ventures, meaning we have the infrastructure and lessons learned to accelerate and de-risk venture building.

Lessons learned from Sentinels

As a venture studio we apply the lessons learned over our collective decades of experience in applying AI and in building and scaling B2B software businesses. Taking our most recent example, the lessons learned building and spinning out Sentinels can be summarised as follows:

The right opportunity

Nothing beats being in the right market, with the right opportunity and tailwinds. We look at three aspects — and all three are equally important to us:

• A compelling current need (i.e., “job-to-be-done” for the software).
• A large eventual opportunity (i.e., do we see a path from the current need to a potentially much larger opportunity).
• A strong hypothesis that machine learning will be the long-term competitive advantage in the market.

The last one seems obvious as we’re an AI company. But we’re not always looking at current AI use cases; we are more focused on what AI will be able to unlock in future. Our short-term approach is pragmatic and might even underplay the AI angle, but we will only co-build a new venture if we believe AI will make the difference in the long run.

The right team

No venture will be successful without an immensely talented and driven founder(s). And no founder can do it alone. We focus on two aspects:

• Assessing the founder(s) for a fit with the venture studio model. This means she needs to have all the confidence, smarts, grit, drive that you would expect from a founder, but she also needs to be open to ask for help, coaching, new ideas. This is a relatively rare combination. Our proprietary model looks for competencies from “spatial ability” to “self-reflection” and “empathy”.
• Act early on to build and incentivise a strong team around the founder(s). Building the team should be a constant priority, and an important area where we can add value to the founder(s). We love to think with founders about questions such as when to add a senior role, or what level of seniority is actually just right for the young venture.

Live by early traction

Without showing early traction, there is no venture. Even though it is true that new B2B ventures typically take more time to gain traction, the right sense of urgency, pragmatism, focus and “growth hack” mentality will make all the difference.

We focus on three aspects, all atypical for a tech company:

• Go-to-market comes first, not tech. We’re solving a need in the market, and this needs to be validated and confirmed by customers signing up and paying for the solution we offer. We constantly remind founding teams not to over-engineer an early solution, but rather spend their time listening to their future customers and users.
• Early branding and marketing to “claim the space”. We don’t wait until the product is proven; we help founders early on to get the message out about their vision.
• “Shamelessly” leveraging our network to support the new venture. The strength of our network is one of the key advantages of Slimmer AI. We’re not shy to ask for help. To ask for an expert opinion. To ask for an introduction.

Smoothing out the ups and downs

Starting a new venture is an intense rollercoaster ride. A founding team does not need us, or another investor or partner, to make it worse. Being the experienced partner with some lessons learned and scars to prove it, we are there to:

• Bring perspective to the founders. When they are overly optimistic, help with some realism. When they are down and it all feels too much, help them see that this is part of the journey and normal.
• Fill in gaps. While we never sit on the founder’s driver seat, we are there to make the venture a success. All founding teams run into capacity crunches all the time. We don’t hesitate to step in and help on a sales pitch, work out details on a product epic, or carry out user research ourselves.

What’s next

At Slimmer AI we’re driven by the impact of applying AI to power people’s work. We help people take better decisions or do less routine, often boring, work. Our pivot to a venture studio allows us to accelerate this impact by building more new AI B2B ventures in Europe.

The next wave of B2B software clearly is AI, and we believe our venture studio approach is the best way to contribute to this. Exciting times ahead!